Budgeting Money? Learn Secrets for Success.

Budgeting money can be challenging. Mastery of this personal finance skill leads to complete mastery of your money, and ultimately, financial freedom.

Dave Briggs, who teaches extensively on personal finance and budgeting, can help you with this process.

This site contains many of the money budgeting lessons from his seminars.

Here, we include some of the common money budgeting questions that he has encountered from decades of helping people develop working family budgets.

Budgeting Money Question #1:

"How often I have heard someone ask, “Can I afford to buy this?” and the question seems subjective when it probably could be much more objective. Could you give me a good layman’s definition for the term "afford"?"

"Can I afford this?" seems pretty subjective, but it doesn't have to be.

One of the benefits of having a working budget is that it captures in one document the plans you have laid down for the coming year.

Here you get specific about plans for income, giving, saving, debt reduction and spending.

The objective is to make financial decisions throughout the year consistent with the budget so that by the end of the year you have met your annual financial goals.

Once you have the budget in place, the phrase "Can I afford it?" simply means, "Is it in my budget?"

Budgeting Money Question #2:

"We don’t have a budget because my husband’s income is different every month and we don’t know how to get started without a fixed monthly figure. I earn a small but irregular income myself. What can we do?"

The best way to handle this is for the two of you to estimate how much you will both make in the next 12 months from your fluctuating income.

Be realistic but conservative. Then take that total and divide by 12 to get a monthly amount and then budget and spend as if you received that amount every month.

The months with more than that will offset the months with less and by the end of the year, you should be pretty close to coming out even.

Create a separate “income account” at your bank and deposit all your pay there and only draw out the budgeted amount every month. That way you can “pay yourself” a steady paycheck every month consistent with your budget.

Everyone needs to budget their money to ensure they are getting the most mileage from their income, but especially when there is uncertainty about the amount and the timing of income.

Budgeting Money Question #3 (Similar to #2):

"I wish I was on a fixed monthly salary since that would make my financial life so much easier, but I have forced to live on monthly commissions that are never the same from one month to the next.

Do you have any suggestions as to how I could manage my money on a more regular basis?"

The best way to handle this is to sit down and arrive at your best estimate of how much you will earn in the next 12 months from your commissions.

Be realistic but conservative. Then take that total amount and divide by 12 to get a monthly amount and then budget as if you received that amount every month.

Open a separate “salary account” and put all your commissions in that account every time you earn them. Only draw out your monthly budgeted average from the account each month and leave the rest in the account.

The months with more income will offset the months with less and by the end of the year you should be pretty close to coming out even. In this way you can live as if you had a fixed monthly paycheck as long as you are disciplined enough to never draw out more than your fixed amount each month.

As long as your annual estimate was fairly accurate, you now have a fixed income.

Learn How to Budget

At Financial Freedom Trail, we are committed to helping you with the essential personal finance skills of budgeting money, reducing your expenses, debt elimination and making more money.

Please visit our Home page to see all the ways that we can help you with your personal finance.

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